Question

Bruno Industries expects credit sales for January, February, and March to be $201,430, $267,600, and $319,700, respectively. It is expected that 75% of the sales will be collected in the month of sale, and 25% will be collected in the following month. Compute cash collections from customers for each month. (Round answers to 0 decimal places, e.g. 1525.) Collections from Customers Credit Sales January February March January $ $ $ February March $ $ $

Answer 1

Month incurred Amount January February March

$ $ $ $

January 201,430 151,072.50 50,357.50

February 267,600 - 200,700 66,900

March 319,700 - - 239,775

151,072.50 251,057.50 306,675

The collections for each month are:

January = $151,072.50

February = $251,057.50

March = $306,675

Step-by-step explanation:

The pattern of collection is that 75% of sales will be collected in the month of sales while 25% will be collected in the following month.

For instance, 75% of January sales ($151,072.50) will be collected in January while the remaining 25% ($50,357.50) will be collected in February. The same pattern applies to February and March.